A performance audit of the San Francisco Housing Authority finds that management problems at the federally funded program have led to a serious shortage of funds and a lack of oversight, vision and planning.

A barred window at the Sunnydale public housing complex in Visitacion Valley. (Photo: Joshua Johnson)

Released Monday, the audit examines how well the Housing Authority is managing its $210 million budget and keeping up with the needs of 31,000 residents in more than 6,000 public housing units.

The Board of Supervisors directed its Budget and Legislative Analyst’s Office to conduct the audit after the U.S. Department of Housing and Urban Development gave the agency a score of 54 out of 100 in December. That put the SFHA on HUD’s “troubled” list, “making it ineligible to apply for competitive grants and meaning it must right itself to avoid penalties, including being placed in receivership,” the San Francisco Chronicle reported at the time. Richmond is the only other housing agency of the 114 in California that is on the troubled list.

The Chronicle had previously done a series of unflattering stories on Henry Alvarez, the former director of the agency, who was let go in April. Alvarez had been the target of discrimination lawsuits by SFHA employees, as well as allegations of favoritism in awarding contracts. An investigation by former City Attorney Louise Renne found that Alvarez’s behavior toward his staff was unprofessional but did not rise to the level of legal discrimination or harassment.

In February, Mayor Ed Lee replaced six of seven SFHA commissioners with city staff. The agency is now run by an interim director, Barbara Smith. Yesterday’s audit did say that the new commission “has worked quickly to identify organizational weaknesses and increase the Commission’s oversight function by requiring detailed financial updates and regular program reports from SFHA staff.” But the commission will have a lot of work to do, according to the report. Some of its findings:

SFHA could run out of cash by July. Although the reduction in federal funds has contributed to the potential insolvency, poor financial management practices have made it worse. SFHA has no cash reserves to cover the deficit.

Despite the funding shortfall, as of March 19, delinquent rents totaled $451,051.

Approximately 5.1 percent of SFHA housing units, or 276 housing
units, are vacant. There are 26,070households on the public housing waiting list and 8,974 households on the Section 8 voucher waiting list.

Waiting lists for public housing are updated infrequently, despite HUD guidelines to do so annually.

SFHA has not had sound procurement practices for at least three years and has not sufficiently evaluated contract proposals. The authority changed the scope of work in contracts without justification.

The authority’s monitoring of contracts is decentralized and inconsistent, increasing the risk of unnecessary costs and improperly awarded contracts.

As of February, nearly 48 percent of public housing residents were delinquent on rent.

These problems, of course, affect real people. KQED’s Joshua Johnson recently profiled one public housing resident who lives in the Sunnydale complex in Visitacion Valley. She reported a host of problems, not the least of which was her inability to get anyone from the housing authority to check on what she believes is asbestos in her attic. The analyst’s report found the agency had a backlog of 2,853 repair requests.